Societe Generale’s technical team reports that the USD/BRL currency pair’s decline stalled near 4.88 in May, with subsequent price action forming a base and struggling to break above the 200-day moving average, indicating weak upside momentum [1]. The technical analysis highlights 5.23 as a critical resistance level for confirming a broader uptrend, while the recent pivot low at 5.04 is seen as important support [1].
In macroeconomic developments, Brazil’s central bank lowered the Selic rate by 25 basis points to 13.75%, marking its fifth consecutive rate cut [1]. The central bank’s statement did not provide new insights, and Societe Generale maintains its view that monetary policy is now on hold [1]. The next central bank meeting is scheduled for November 4th, following the presidential election runoff on the same day and the second round on October 25th [1].
Societe Generale notes that tightening by the US Federal Reserve has narrowed the easing window for Brazil’s central bank (BCB), and their house call is for easing to resume only in the second quarter of 2027 [1]. No immediate market reactions or analyst opinions regarding the Brazilian Real’s movement were discussed in the article [1].
CONCLUSION
The USD/BRL pair remains capped by technical resistance at the 200-day moving average, with key levels identified at 5.23 and 5.04. Brazil’s central bank has paused its rate-cutting cycle, with further easing expected only in 2Q27. Market sentiment appears cautious, with no strong directional momentum indicated.